Decade of rising fuel costs hits public, private sectors

Consumers aren’t the only ones feeling the pinch of high gas prices. And a Prius isn’t much good on a farm.

“You can get some of it back, but the market conditions can vary,” said David Winter, owner of Winter Farms in Orchard Park. He grows vegetables, raises turkeys and mostly sells his wares to local farmers markets.

Gasoline costs are closely tied to the price of oil, which is subject to regular fluctuations based on a host of international and domestic factors, said Wallace Tyner, an energy economist and professor at Purdue University. But generally speaking, that price has risen sharply in the past seven years. It was $61.06 per barrel in December 2005 and $88.08 in August 2012, according to federal statistics.

That nearly 30 percent increase gets passed along until somebody eats the cost, Tyner said. The buck stops at Winter Farms, which uses a “couple thousand” gallons each season, and which doesn’t control the sale price of food or the purchase price of gasoline.

For decades, oil fluctuated around the $20-per-barrel mark, he said. But tightening supply and exploding demand in places such as China, India and the United States sent those prices steadily upward starting in 2004. The prices peaked in 2008 at about $144 per barrel.

“Gas affects everything because everything gets hauled in this country,” Tyner said. “Most of the food we eat comes from somewhere else and most of the products we consume come from somewhere else.”

• Buffalo-based American Stainless Corp. has five trucks that drive, in total, about 1,000 miles each day, all on diesel engines that aren’t fuel efficient, General Manager Larry Mentkowski said. There’s been a rise in cost over the past decade that totals more than $1,000 each day.

The company, which was founded in the mid-1990s and has about 47 employees, buys metal in bulk from metal mills and then redistributes it in smaller quantities to places from Erie, Pa., to Syracuse.

“We try not to pass the price on,” Mentkowski said. “We deliver to customers and try not to hit them with any additional charges, so we end up typically absorbing it.”

• Taxpayer-funded entities feel it, too. Fuel charges for the Town of Tonawanda Highway Department were $294,034 in 2005. Since then, the yearly fuel charges have fluttered but generally risen. They came to $459,404 in 2011. The budget for the current year is $428,516.

“The price of doing business has gone up quite a bit,” said William Swanson, the town’s highway superintendent.

In the near future, consumers of oil-based products face little choice but to deal with the cost. Political struggles in the Middle East, Europe’s economic woes and domestic policy decisions will all play a role, but how they will drive the price is not clear.

“If we really are going to start growing again, both here and in Europe and China, then the price of oil is going to go up,” Tyner said. “I’m not convinced that’s going to be the case.”